In recent months, online betting houses have become the focus of attention in Brazil, generating controversial discussions due to studies and surveys that highlight challenges such as increasing debt and gambling-related problems. A study by the Central Bank revealed that in August, 5 million beneficiaries of the Bolsa Família transferred about R$ 3 billion (US$ 546m) to these platforms via Pix.
In the interview, Marcos Sabiá emphasized that while 85% of the population is in debt, this is not solely due to sports betting but rather to inequality in Brazil. He pointed out that the real issue is the lack of regulation, attributed to a general ignorance about the sector, the influence of lobbies, and the bad faith of some companies that use the activity for illicit purposes, such as money laundering.
“When we have discussions about debt, 85% of people are indebted in Brazil. Now, don’t tell me that people are indebted because of sports betting. They are in debt because Brazil is unequal. Every real that someone bets comes from some sector, but it’s a lie, not to say criminal, to claim that this money will come from someone's refrigerator.”
According to the executive, the biggest problem is that Brazil took too long to regulate these bets (as the operators are called in Brazil) —blame, according to him, lies with a significant ignorance about the sector, sectoral lobbies, and also the bad faith of companies that use the activity for obscure purposes, such as money laundering or illegal political financing.
Regarding a tightening of the rules for advertising betting houses—some advocate for a total ban, similar to what occurs with alcohol and tobacco—Sabiá states that companies have already made a commitment to the National Council for Self-Regulation in Advertising (Conar), which includes a series of requirements for these advertisements. “For example, the commitment not to target and not to use minors in advertisements, to advertise responsibly, treating gambling as entertainment and fun, while warning about the risks of compulsion.” He admits, however, that “regulation, like everything in society, is a living organism.”
Marcos Sabiá is an executive whose profile few would initially associate with running a betting house: he is an evangelical pastor—unpaid—who does not drink or smoke. But he states that he has no doubt that a regulated market for alcohol and tobacco is better than an unregulated one. “It was the lack of regulation that created Al Capone in the United States.”
His company is part of the Playtech group, founded in Estonia in 1999, listed on the London Stock Exchange, and present in 19 countries. In the first half of 2024, the global business reported revenue of €907 million, with a profit of €10 million, according to the balance sheet.
Why is Brazil only now regulating sports betting and online games, given that these operations started in late 2018?
There is a tripod to answer this question, involving ignorance, sector defense, and, in some cases, bad faith. A significant part of this delay in Brazil is due to an agenda that we have had since the Vargas Era, when we started relegating gambling to illegality, largely due to the influence of religious convictions. I say this with authority because I am an evangelical pastor—I do this voluntarily and have never been paid.
Brazil is, along with Indonesia, among the G-20 countries that have not regulated 'Bets'. Indonesia has religious justifications, as it is a majority-Muslim country, and I respect their opposition to gambling. I am a person who does not drink or smoke, but I have no doubt that a regulated market for alcohol and tobacco is better than an unregulated one. It was the lack of regulation that created Al Capone in the United States.
The bad faith component of the tripod comes from those who operate illegal gambling for money laundering or to generate off-the-books cash for political campaigns. This operator assumes that legalization of gambling, regulation, will be worse for their business because they will not be able to operate in a legal environment.
So, your opinion is that the new legislation is favorable for both companies and society?
The Secretary of Prizes and Bets, from the Ministry of Finance, has been quite republican in these discussions, opening the debate to the sector, civil society organizations, associations representing players, the Ministry of Health, and Congress.
The regulation brings lessons learned from what has happened around the world in terms of regulation. We have seen countries that tried to regulate but imposed excessive taxation and realized that if you tax the player too much, they will go to the illegal market, and regulation will not achieve its goal. On the other hand, the state's objective should be that so-called "Laffer curve," which is to find the maximum taxation with an environment where people are encouraged to remain legal. It is at that optimal point that taxation should occur.
Are there cases of people taking loans to bet, and even young people getting involved with loan sharks because of this? Is there a solution for this?
We are at a moment when 'Bets' are receiving kicks instead of discussing proposals. When we have discussions about indebtedness, 85% of people are in debt in Brazil. Now, don’t tell me that people are indebted because of sports betting. They are in debt because Brazil is unequal.
We are the eighth-largest economy in the world, but there is an abyss between the rich and the poor. There is a risk of people getting into debt due to sports betting, yes. But minors will not be able to play, and they cannot today on galera.bet. There have been suggestions to include loans within 'Bets'. But the sector itself regulated this and required cash transactions. People have always taken loans to gamble because they are compulsive individuals. Sick people should be treated as such, and regulation, with an online system, will allow blocking the CPF of the bettor. We are also discussing the possibility of creating a kind of bettor score to identify indebtedness.
How to deal with the problem of gambling addiction?
We identify the compulsive gambler using artificial intelligence resources to start making that person’s experience more difficult, in order to discourage them from gambling. We can even block this person on the platform. However, if I do not have this as a state policy today, the blocking is almost ineffective, because if the player is blocked on my platform, they will go to another platform that does not have this concern. Serious companies in the sector have always been enthusiastic about a regulation that could think about combining a healthy business environment that protects the vulnerable.
In this period without regulation, issues of scams, misleading advertising, and money laundering have accumulated in the country. How to combat this?
Brazil has very solid instruments to combat this. From the beginning, we have stressed the importance of having Brazil's banking system (in the ecosystem of 'Bets'), not just as a partner through payment methods but as a benchmarking for some practices regarding the regulation of the sports betting market.
Betting houses are very similar to banks. People deposit their capital, tangible and intangible, and do this out of trust in the system. You deposit money in bank X and sleep peacefully because you are not afraid that your money will disappear. In countries where this fear begins to emerge... We have seen what happened here during the Collor plan when people started pulling money from banks to put it under their mattresses.
In the market for cigarettes and alcoholic beverages, advertising has been banned, and there are discussions about extending this to 'Bets'. How does the sector view this?
The good companies in the sector are so concerned about this topic that it has already been the subject of discussions with the Ministry of Finance. Regulation, like everything in society, is a living organism. In a commitment we built together with Conar, we bring a series of requirements for companies to comply with in advertising.
For example, the commitment not to target and not to use minors in advertisements, to advertise responsibly, treating gambling as entertainment and fun, while warning about the risks of compulsion and understanding gambling as a supplement to income or a possibility of enrichment.
Shouldn’t the 'Bets' legislation have been tougher on this advertising for enrichment and the offer of bonuses to bettors?
No, I think the regulation addresses this well, especially since we are eliminating bonuses to avoid that attraction starting in January. Good operators are the most concerned about what bad ones do with advertising.
What will regulation change in your company's daily operations?
Since January 2022, we have already operated as a regulated company because I am controlled by a publicly traded company on the London Stock Exchange, which does not want to risk its reputation. We are a subsidiary that upholds values, combats illegal gambling, misleading advertising, and gambling addiction.
We also combat the exploitation of minors in relation to gambling. From the first moment, I require that the person enter their CPF to open an account. Instantly, we check if that CPF belongs to a minor. If it does, I do not allow the account to be opened. We identify if the CPF belongs to a politically exposed person, a person with a final criminal conviction, a deceased person, or a compulsive gambler. I do not want to handle resources that come from crime on my platform. It is mandatory that the deposit be from the same account holder as the bettor, also to avoid money laundering.
Retail has been a strong critic of the 'Bets'. How do you see this issue?
It is inevitable that we will have discussions between different sectors, just as there were when Uber came to Brazil and we had the discussion with taxis. Today, no one discusses whether to use Uber, 99 or a taxi, especially since you now have a regulated environment in this regard. It is inevitable that different sectors of the economy will move, bothered by the growth of betting houses. Every real that a person bets comes from some sector, but it is a lie, not to say a criminal, to say that this money will come from the person's refrigerator.
The people who do this are compulsive gamblers, the gambling addicts. This group makes up 1% to 2% of all gamblers. People will not stop eating or paying their bills to gamble, but they may stop going to other entertainment, because betting is an entertainment sector. The State cannot infringe on these individual freedoms as long as the person is enjoying something healthy, something that is good for them, that does not affront their physical integrity.
In lotteries, the amounts of bets and prizes are reported. With the legislation in force, this will be possible for 'Bets' as well. Will this transparency help the industry's reputation?
It will help a lot. Every now and then, a report comes out about betting. There are good reports and there are omissions. This market has companies with open capital abroad, audited companies, and those that take money to organized crime. There are betting companies involved in Federal Police operations where you opened an account with your cell phone number, you didn't even need your CPF ("Individual Taxpayer Registry).
Starting next year, companies will need to transmit information in real time to Serpro (the federal government's Federal Data Processing Service). Then, yes, we will know how much was deposited, withdrawn and how much was left in the account. The good reports made reservations about the difficulty of gathering information about the industry, as Itaú did.
The legislation should clean up the market, but we are still talking about more than a hundred companies. Could this lead to a consolidation movement in the industry?
This is already happening intensely. We will go from a betting market with thousands of brands to a maximum of 360. I don't believe that we will have this number of companies with licenses in Brazil, because not all of them are ready to meet all the requirements. The market does not have large margins, it is commoditized and there is competition from large international companies with high investment capacity.
This market needs a lot of investment. And this is another point: in addition to 'Bets' returning 85% of what comes in to bettors, this 15% becomes club sponsorships, media investments, charities and jobs. These are companies that invest hundreds of millions of reais in other sectors of the economy. We will still have to pay taxes. Many companies will leave or join forces to work in Brazil.
Source: Estadão
